Chancellor right to offer caution on public sector pay

Following Philip Hammond's warning that the government must hold its nerve on public sector pay, John O'Connell, Chief Executive of the TaxPayers' Alliance, said:

"The chancellor is right to offer caution on public sector pay and to say that we need a grown-up debate about spending. The nation's public finances are still in a dire state so it would be unwise to pander to those looking for easy answers to difficult questions.

"We must not forget also the huge long-term costs to taxpayers of other benefits such as public sector pensions, which are far more generous than those on offer in most of the private sector. The long-term liabilities for these pensions are kept off the books and it is future generations who will have to pick up the tab.

"It's right that public sector employees working hard in providing frontline services and doing a great job are paid appropriately. But because pay is set nationally, there are parts of the country where public sector workers are relatively underpaid and others where they are relatively overpaid. Until politicians are willing to tackle centralised pay bargaining and allow more flexibility in the system, we will continue to see these disparities up and down the country."

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